Royal Bank of Canada’s chief executive officer delivered an upbeat view of the Canadian housing market to a New York audience, just a day after the International Monetary Fund expressed concerns about it.

David McKay believes consumer demand is roughly in line with supply, particularly after housing starts fell 16 per cent in February, rebutting concerns that sharply rising home prices have fed a speculative bubble that is in danger of bursting.

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Mr. McKay said he expects economic growth of about 2.4 per cent this year, with lower energy costs and a cheaper dollar shifting economic activity to companies that export to the United States, providing a healthy backdrop to the housing market and driving overall domestic job creation.

He pointed out to his U.S. audience that multifamily residential housing – largely condominiums – are not financed without selling at least 70 to 80 per cent of the units prior to construction, preventing what he called the speculative build of excess supply.

As for single-family homes, he said there has been a shortage of new homes built in key markets such as Vancouver and Toronto, and new land is not being released into construction.

“A lot of the price inflation that you’re reading about in the Canadian housing market is largely driven by lack of supply in single-family homes, strong household formation, strong immigration numbers – so demand is still there,” Mr. McKay said.

The average price of a detached home in Toronto rose above $1-million in February for the first time, up 9 per cent from a year earlier, according to the Toronto Real Estate Board.

Mr. McKay’s remarks follow considerable unease among a number of other observers.

The IMF warned on Monday of Canada’s “overheated housing markets and high household debt,” and called for reforms to centralize oversight of the financial sector.

The Bank of Canada estimated late last year that house prices may be overvalued by as much as 30 per cent.

And McKinsey Global Institute found that the Canadian household debt-to-income ratio was the world’s second highest, next to Greece, between 2007 and mid-2014. It added that debt burdens are higher today that they were for U.S. consumers prior to the housing collapse there.

But Mr. McKay reminded his audience that, due to Canadian government guarantees on mortgage insurance, bank balance sheets are protected from property losses of less than 25 per cent.

For RBC’s uninsured mortgage portfolio, he said the average equity holding is 45 per cent, protecting the bank from a housing market that is showing no signs of stress.

However, Mr. McKay’s message wasn’t entirely free from concern about the future.

He singled out the threat from mobile payment systems offered by the likes of Apple Pay and Google Wallet, which can push traditional banks into a lower-profile relationship with customers.

“The last thing anybody wants is to have someone between you and your customer, and that’s what we now have in the payments space,” he said.

“We are on a collision course with the Googles and the Apples of the world,” he said. “Would you ever pick a fight with those types of companies? No, but we are on that course.”

Mr. McKay said RBC is helped by a long-standing relationship with customers and merchants based on trust and security – but the bank can’t be complacent.